Kernel spice up suite with hedging, cash and active bonds

Passive investment specialist Kernel Wealth has added a touch of active management to its mix by launching new balanced and cash funds when it first taps into fixed income assets.

Kernel founder Dean Anderson said: new hire portfolio Manager Matthew Winton internally manages cash and municipal bond portfolios according to various parameters such as duration, yield and credit risk, but broadly to standard benchmarks.

Anderson said investor demand for exposure to bonds has increased and is moving away from pure equity investments as cash yields improve.

“You can now get a decent yield out of your cash, which is probably appealing to many investors who may have found conservative funds to be not what they thought they were.

According to a product disclosure statement, Kernel Cash Plus Fund “is actively managed and invests in investments in New Zealand short-term fixed income assets and other cash and cash equivalents.”

Meanwhile, the new Balanced Fund, which will be the second diversified strategy in the Kernel Suite after the launch of all-equity high-growth options in April this year, will invest in the manager’s other 14 equity instruments, with a 5% of cash. 17% in NZ bonds and 18% in global bonds.

“We get global bonds through offshore exchange-traded funds,” said Anderson, with Kernel providing a hedging overlay.

The new kernel product, which also includes a hedged version of the S&P Global 100 Fund, will be available in the group’s KiwiSaver scheme and in the wider market.

Anderson said recent volatility in the New Zealand dollar has fueled interest among Kernel clients for a currency management strategy that committed $10 million at the launch of the hedged S&P Global 100 fund.

Kernel priced the new fund with an all-in fee of 0.25%. This is on par with most of the current 17 product range, with the exception of his three exotic themed strategies, which are offered at 0.45%.

Since its launch in 2019, the Auckland-based boutique has managed approximately $350 million, including $20 million in an early KiwiSaver scheme launched in April this year. End of June.

Administrators provide storage and management of kernel funds, and trustee executors are supervisors.